Medical Tourism Is Big Business But Still an Emerging Market

Dan Peltier, Skift

- Mar 10, 2017 12:30 am

Skift Take

As more tourists go abroad for medical treatments there’s still disconnect in the travel industry with how to accommodate travelers’ times getting treatment and the rest of their in-destination experiences.

— Dan Peltier

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With perpetually rising healthcare costs in countries like the U.S. or poor quality hospitals and doctors in other regions, medical tourism is thriving but many travel brands remain uncertain with how to address and market medical travel.

That’s the view of Josef Woodman, the CEO of Patients Beyond Borders, an organization that connects travelers to accredited hospitals, doctors, and specialists around the world. Woodman feels that medical tourism — which Patients Beyond Borders defines as crossing borders for cost or access to quality surgery or other diagnosed treatment — “isn’t sexy to talk about” because most medical tourism involves routine visits to dentists or primary care physicians rather than life-saving surgeries, for example.

Woodman estimates the global medical tourism market ranges from $40 to $60 billion with 12 to 14 million travelers taking medical trips each year for things such as dental cleanings, cancer treatment and reproductive health. “The media tends to focus on life-saving surgeries but most medical tourism is much less dramatic,” he said.

Globally, dental treatments are some of the most common reasons for medical tourism, said David Vequist, founder and director of the Center for Medical Tourism Research at the University of the Incarnate Word in San Antonio, Texas. Vequist has worked with governments in countries such as South Korea, Turkey, Mexico, Colombia and Germany on their medical tourism strategies.

Demographics for medical tourism depend on the procedure, said Vequist. But more females travel for medical treatments than males and the average age for a medical tourist tends to skew older for many treatments. “This shouldn’t be too much of a surprise because in the U.S. and many western cultures at least, women tend to make most of the healthcare decisions for their families,” he said. “And medical tourists tend to be older simply because healthcare utilization increases as you age.”

Some 99 percent of medical travel involves a diagnosis a traveler already received before making a trip, Woodman said.

“We consider preventative health screening as part of medical travel which is becoming a lot more popular,” he said. “Most people have at least seen a doctor before traveling.”

MEDICAL TOURISM HOTSPOTS

Though it’s difficult to track medical tourists in each country Indonesia is likely the largest outbound medical travel market. “Indonesia’s healthcare infrastructure is generally poor and about 1.5 to two million Indonesian medical travelers go to Southeast Asia or Australia depending how upwardly mobile they are,” said Woodman.

Bus lines from Kuala Lumpur International Airport to local hospitals are part of daily life in Malaysia’s capital city mainly because of medical travelers from Indonesia, said Vequist. “Even restaurants in the city are aware of the large medical travel market and have Halal menus for medical travelers coming from Muslim-majority countries in the region such as Indonesia.”

Patients Beyond Borders estimates about 1.2 to 1.3 million U.S. travelers take trips for medical reasons each year. Some 50 percent of U.S. medical travel trips are to Mexico for dental care and 15 percent take trips for cosmetic procedures. “U.S. bedside manner and patient admin experience is terrible and healthcare costs in the U.S. are high but patient care and quality is still number one,” said Woodman.

China is also one of the largest medical tourism markets as many Chinese travelers look to Thailand and other Southeast Asian destinations for better healthcare.

Thailand has carved out a corner of the medical tourism market. “Bumrungrad has tapped out the Middle Eastern patient and now they’re looking at China based on a conversation I had with them recently,” said Woodman. “China has huge health care gap and the largest drivers for medical tourism in China are for treating lung cancer and pediatrics.”

Improving Medical Tourism Infrastructure

Though Thailand is synonymous with quality and affordable healthcare with many travelers, Patients Beyond Borders also considers Costa Rica, India, Israel, Malaysia, Mexico, Singapore, South Korea, Taiwan, Turkey and the U.S. as top medical travel destinations based on government and private sector investment in healthcare infrastructure, medical tourist arrival numbers, tourism infrastructure and quality of healthcare available.

More than 800 hospitals around the world are accredited by Joint Commission International, an organization founded in 1994 that grants one of the highest accreditations a hospital can earn for the quality of care provided. In 2007 only 27 hospitals in the U.S. and abroad had achieved Joint Commission International accreditation, said Woodman.

More than 1,000 accreditations are expected by 2020 and most of the growth in accredited hospitals is in the Middle East and China, the latter with 77 accredited hospitals.

Albeit, 77 accredited Chinese hospitals isn’t sufficient given the country’s population tops one billion people and high healthcare costs force many Chinese travelers to seek medical care abroad.

Galenia Hospital in Cancun, Mexico said it receives about 250 medical tourists a year — mostly from the U.S. — for plastic surgeries, stem cell treatments, cancer treatments and births, for example.

Travelers from Canada, Russia, and a few European countries are also among the hospital’s largest visitor markets. “Galenia Hospital has also seen a constant increase in visits to its facilities from medical tourism each year,” said Olivia Laviada, the hospital’s medical tourism manager.

Brands Promoting Medical Tourism

Some travel brands such as Turkish Airlines have marketed directly to medical tourists.

Vequist said medical travelers are profitable for destinations because they typically stay longer and require more transportation than the average tourist. “In general a tourist that travels to a country for medical travel is going to spend five to six times more on average during their trip than a regular tourist,” he said.

Some governments have made efforts to get hospitals and hotels to create packages for medical tourists, said Vequist. “In the U.S. one of the most frequented medical travel locations for foreigners is Houston and the city is really one of the best examples in the world for a strategy that gets everyone on the same page about medical travel,” he said.

More than 60 percent of hotels bookings in downtown Houston — an area concentrated with hospital and healthcare facilities — are medical tourism related, said Vequist. “In Houston, they have an international patient advisory committee that includes members of the local government, city restaurants, hotels, airport personnel and hospitals,” he said. “They all get together every couple of months and talk about the impact of medical tourism on the downtown Houston economy.”

Hospitals also buy or build their own hotels and may flag them as part of a major brand, said Vequist. “We’re seeing this in Mexico, in Cleveland, Ohio and in Italy, for example,” he said. “A lot of this is because the margins of a traditional hospital in the U.S., for example, are lower than the margins of a hotel but yet the competencies are very similar. This is the kind of thing hospitals have been doing forever but more are now expanding into medical tourism with their own hotels.”

Dubai is one example of a city aggressively targeting medical tourists with its plan to attract more than half a million such arrivals by 2020. The Dubai Health Experience, an initiative of the Dubai Health Authority, Dubai Department of Tourism and Commerce Marketing and other government organizations, launched last year and helps travelers book flights, accommodations and medical treatment packages at Dubai hospitals and clinics.

Travel Brands’ Medical Travel Challenges

While many travel brands are attuned to wellness tourism trends their medical travel packages and offerings are lacking, said Woodman. “Medical travel puts a damper on the luxury travel experience that brands like hotels are trying to portray,” said Woodman. “Many hotels can’t figure out how to advertise medical tourism in a way that does everyone a lot of good from a PR standpoint.”

Booking medical travel online can also be a hassle and many online travel agencies and travel agents don’t offer medical travel packages. “Third parties are starting to bundle medical travel packages together but there’s still not a critical mass of these packages,” said Woodman. “Orbitz approached us five years ago about medical packages but the travel industry wasn’t ready yet.”

For now, booking medical travel such as flights, booking and making special accommodations at a hotel and making appointments for procedures is mostly piecemeal. “There’s not a TripAdvisor for medical travel but that world is building,” said Woodman. “But TripAdvisor has excellent forums for medical travel if you dig deep enough.”

The Inconvenient Truth of Medical Travel

Some medical trips are tied to leisure travel when tourists travel for medical treatment and already had a vacation planned.

Still, going to another country for medical treatment is logistically and financially stressful in many cases. Some 70 percent of all medical tourism procedures worldwide aren’t covered by private insurance, according to Patients Beyond Borders.

Plus, it’s difficult to have fun and tack-on a bus tour or museum visit if a traveler has a major surgery and can’t leave a hospital which makes it tricky for travel brands to market to medical travelers.

Privacy rights and balancing how to accommodate travelers while not prying through medical histories is also a major hurdle for brands.

There’s also much disagreement about what is and isn’t considered medical travel. “In the U.S. some other tourism advocacy groups and organizations weren’t counting U.S. residents going to Mexico for dental procedures in anticipation of Obamacare,” said Woodman.

Vequist said traveling to states or countries to purchase medical marjuana or for assisted suicide, for example, are also contested by medical travel researchers as forms of medical tourism.

With health insurance, cosmetic surgeries and breast augmentations, for example, are also controversial parts of defining medical tourism because in many cases they aren’t medically necessarily.

Along that vein, medical spas are a $5.7 billion global industry according to the Global Wellness Institute but some organizations associate spas with wellness rather than medical treatments.

More serious, elaborate or rare procedures are reasons for some medical trips but don’t represent why most travelers cross borders. Most travelers want to escape exorbitant treatment costs and access basic, routine care.

In Thailand, for example, the average medical traveler can save 50 to 75 percent on their treatments than if they had the same treatments in their own countries, Patients Beyond Borders found.

Hungary’s universal healthcare, like other such systems in Europe, has its flaws. “There are 300 dental clinics in an Austrian border town with Hungary and each opera season there are charters and tours that bring people from Hungary to the opera and then to get a dental cleaning or treatment because it’s that much cheaper,” said Woodman.

The future of medical tourism and consumers’ desire to travel for treatments, however, hinge on the need to get more affordable and higher quality care than in their own communities more than travelers taking a vacation and adding a hospital or clinic visit to a trip.